Many drugs remain legal after 'bath salts' ban
WASHINGTON (AP) — People are inventing so many new ways to get high that lawmakers can't seem to keep up.
Over the past two years, the U.S. has seen a surge in the use of synthetic drugs made of legal chemicals that mimic the dangerous effects of cocaine, amphetamines and other illegal stimulants.
The drugs are often sold at small, independent stores in misleading packaging that suggests common household items like bath salts, incense and plant food. But the substances inside are powerful, mind-altering drugs that have been linked to bizarre and violent behavior across the country. Law enforcement officials refer to the drugs collectively as "bath salts," though they have nothing in common with the fragrant toiletries.
President Barack Obama signed a bill into law earlier this month that bans the sale, production and possession of more than two dozen of the most common bath salt drugs. But health professionals say lawmakers cannot keep pace with bath salt producers, who constantly adjust their chemical formulations to come up with new synthetic drugs that aren't covered by new laws. Experts who have studied the problem estimate there are more than 100 different bath salt chemicals in circulation.
European losses hurt Ford 's 2Q profit
DEARBORN, Mich. (AP) — Just three years after Ford revived its American business, the company is planning an even trickier turnaround in Europe, where mounting losses weighed down its second-quarter results.
Ford's net income fell 57 percent to $1 billion in the April-June period, largely because of a $404 million loss in Europe. Car sales there have tumbled to 20-year lows because consumers lack confidence in the economy. Ford expects to lose more than $1 billion in Europe in 2012, double its estimate from the beginning of the year.
The company wouldn't give details about its turnaround plans on Wednesday, but analysts say layoffs and plant closures are inevitable. Europe is vital to Ford. A quarter of its sales and profits come from the region, which is Ford's largest market after North America. Four straight quarters of losses in Europe are taking a toll.
Toyota takes first-half global sales lead from GM
TOKYO (AP) — Toyota bounced back from safety recalls and natural disasters, selling 4.97 million vehicles globally in the first half of the year to retake its crown as the world's top automaker from General Motors Co.
The Japanese company sold about 300,000 more cars and trucks than GM did in the first half of the year, a lead large enough that it will be difficult for GM to catch Toyota in the final six months of 2012.
GM said it sold 4.67 million vehicles during the first half.
American Airlines CEO bashes US Airways, calls it desperate
BOSTON (AP) — American Airlines CEO Tom Horton wants to set the record straight: It was he who approached US Airways CEO Doug Parker about the possibility of combining the two airlines, not the other way around.
Horton has never made that fact public before, but he's doing so now to send a message. If American is going to combine with US Airways or any other airline, the decision will be Horton's.
Since American's parent AMR Corp. filed for bankruptcy last November, Parker has been aggressively promoting a combination of the two airlines as the only way to save American. Parker has championed the idea on Wall Street, in the media and lined up support from the three labor unions at American. Investors have treated the possibility as a near inevitability, pushing up shares of US Airways Group Inc. 150 percent over the past seven months.
But in an interview with The Associated Press, Horton was emphatic that there's more financial pressure on US Airways than American to find a partner. And he cited Parker's repeated overtures as a sign of desperation.
US new-home sales fall to 350,000, 5-month low
WASHINGTON (AP) — Americans bought fewer new homes in June after sales jumped to a two-year high in May. The steep decline suggests a weaker job market and slower growth could make the housing recovery uneven.
The Commerce Department said Wednesday that sales of new homes fell 8.4 percent last month from May to a seasonally adjusted annual rate of 350,000. That's the biggest drop since February 2011.
GOP: Geithner failed to tell Congress about LIBOR
WASHINGTON (AP) — Republican lawmakers are criticizing Treasury Secretary Timothy Geithner for failing to alert Congress four years ago that banks could have been manipulating a key global interest rate.
Geithner, who was then president of the Federal Reserve Bank of New York, said he immediately alerted U.S. and British regulators in 2008 when he learned of problems with the London interbank offered rate, or LIBOR. He also said the problems were written about in the financial media.
Geithner defended his actions Wednesday at a hearing of the House Financial Services Committee.
Citigroup's ex-CEO does an about-face on big banks
NEW YORK (AP) — Sandy Weill is having a change of heart.
Weill, the aggressive dealmaker who built Citigroup on the idea that in banking, bigger is better, said Wednesday that he believes big banks should be broken up.
Speaking on CNBC's "Squawk Box," the 79-year-old Weill appeared to shock the show's anchors when he said that consumer banking units should be split from riskier investment banking units.
That would mean dismembering Citigroup as well as other big U.S. banks, like JPMorgan Chase and Bank of America.
USDA says drought will push up food prices in 2013
MINNEAPOLIS (AP) — The drought gripping more than half the country is a major reason why consumers can expect to pay 3 to 4 percent more for groceries next year, the Department of Agriculture said Wednesday.
Milk, eggs, beef, poultry and pork prices will all be affected because the drought has pushed up prices for feed, and that will eventually translate into higher prices for steaks, hamburger, pork chops and chicken. The good news for cost-conscious consumers is that prices for fruits and vegetables, as well as processed foods, aren't affected as much by the drought.
Exactly how much more people might pay for a pound of hamburger, for example, isn't known because those prices are affected by lots of factors, including how much of the increase a given supermarket might pass along to the consumer. But beef prices as a whole are expected to see the biggest jump at 4 to 5 percent, according to the USDA.
Boeing 2Q net income up; raises outlook
NEW YORK (AP) — Boeing Co. posted a surprise improvement in second-quarter net income Wednesday as demand for passenger jets thrived and its defense business held its own.
The maker of 737 aircraft and F-18 fighter jets also raised its earnings forecast for the year, suggesting demand for new planes could insulate it from the sluggish global economic environment.
Boeing's 3 percent profit increase handily beat forecasts from Wall Street analysts, who worried that sales in Boeing's defense unit would fall amid lower defense spending in the U.S. and Europe. Boeing said that it was reining in costs to protect earnings in the segment that produces Chinook helicopters and F-18s.
PepsiCo profit hit by China deal; beats estimates
NEW YORK (AP) — PepsiCo's second-quarter results had some fizzle, but very little pop.
The maker of everything from Frito-Lay chips to Tropicana juices said Wednesday that its net income fell 21 percent but beat Wall Street estimates. It spent more on advertising to cement its brands in consumers' minds and continue to raise prices.
But so far, its price hikes, which are intended to offset PepsiCo's higher costs for ingredients, are yielding mixed results. Worldwide, the increases boosted sales of its existing brands that were not part of acquisitions, divestitures and foreign-exchange translation, by 5 percent. But they put pressure on its key North American soda business, which had a 4 percent drop in volume.
By The Associated Press(equals)
The Dow Jones industrial average rose 58.73 points, or 0.5 percent, to 12,676.05. The Standard & Poor's 500 slipped 0.42 points, or 0.03 percent, to end at 1,337.89. The Nasdaq fell 0.3 percent, or 8.75 points, to close at 2,854.24.
Benchmark U.S. crude added 47 cents to end the day at $88.97 per barrel in New York. Brent crude increased by 96 cents to finish at $104.38 per barrel in London.
In other futures trading, heating oil added 1.96 cents to end at $2.844 per gallon, while gasoline lost 3.19 cents to finish at $2.7929 per gallon. Natural gas fell by 11.7 cents to end at $3.07 per 1,000 cubic feet.